While the European Investment Bank is making efforts to end fossil fuel funding, the Juncker Commission is doing its best to frustrate it – and to undermine Ursula von der Leyen, writes WWF’s Sébastien Godinot.
Sébastien Godinot is an economist at the WWF European policy office.
Incoming EU Commission President Ursula von der Leyen wants to turn the EU’s biggest bank into a ‘Climate Bank’ and take the EU to net zero emissions by 2050. Yet the Juncker Commission, even as it prepares to leave office, is attempting to cut the legs from under her plan.
Following von der Leyen’s election in July, the European Investment Bank (EIB) proposed ending its funding for fossil fuels from 2021. The EIB would have been the first multilateral lender to make such a commitment, showing the EU leading on sustainable finance and climate action. Ending fossil fuel financing would have been a major step towards becoming von der Leyen’s ‘EU Climate Bank’.
However the proposal was not adopted. Instead, it was undermined by parts of the Juncker Commission and countries like Germany and Hungary. They wanted gas power – a fossil fuel which is incompatible with a net zero emissions future – to remain eligible for EU public money.
So the EIB issued a new energy lending proposal. This one contains a list of gas projects for funding. It also contains loopholes for other gas projects to carry on being financed. The EIB Board will vote on this proposal on 15 October.
The new proposal is an attempt by the gas lobbies, via the European Commission, to syphon money away from the renewable technologies which threaten their future. If it is adopted, the gas lobby will have succeeded in slowing the EU’s progress towards a sustainable, climate neutral future.
The entire purpose of public banks is to finance projects with obvious benefits for society, but which markets may not want to back. Research on batteries and storage, development of cutting-edge wind and solar power, energy efficiency upgrades: these are the sorts of projects the EIB should support.
The recent climate mobilisations, and the EU elections results, show that citizens across Europe want action in line with climate science. Incoming Commission President Ursula von der Leyen has presented a net zero emissions vision for Europe, even if those emissions need to come down faster to tackle the climate crisis.
The EIB’s Directors should follow this vision, follow citizens’ calls, and vote to exclude all fossil fuels – for good.